Here’s Another Federal Law You Need to Know About…

Have you heard of the federal False Claims Act?  While the FCA has nothing to do with education, it can be used as the basis of a lawsuit against a school district, as has happened in Tangipahoa Parish, Louisiana.

The FCA is designed to prevent the misuse of federal funds. It imposes liability on those who make false claims to federal funds, (ever heard of Medicaid fraud?) or misappropriate them.  Thus any recipient of federal funds is a potential target under the FCA.  Moreover, the FCA has its own “whistleblower” provision.  A person who is punished in retaliation for reporting, or seeking to prevent, the misappropriation of funds may have a federal cause of action.

In Tangipahoa Parish, a JROTC instructor alleged that he was harassed, badgered and ultimately transferred to another school, more than an hour away from his home.  He alleged that all of this came after he reported what he believed to be a misappropriation of JROTC funds by the school that he worked for.  He filed suit under the FCA, and the 5th Circuit recently held that he had adequately plead his case, thus denying the school’s Motion to Dismiss.

The school tried to get the case tossed out by noting that the higher-ups in the district were completely in the dark about this.  The plaintiff did not allege that the superintendent or the members of the school board had any knowledge of any financial hanky panky.  The plaintiff’s allegations only reached as high as the principal.  Can the district be held liable because of something the principal did?  Yes.  The court held that it was “plausible that [the principal] was acting within the scope of his employment, or at the very least, with the apparent authority of the School Board.”  That was enough to put the school board in play as a potential defendant in the case.

For the lawyers, this case is important because of its broad interpretation of vicarious liability under the FCA. Under this decision, school districts face potential liability based on wrongdoing of a campus principal, even when the superintendent and board are completely innocent.  This is not how things usually work in federal cases.

For educators, the case is important because it gives us an example of another type of “protected activity.”  We must be sure not to retaliate against someone based on “protected activity.”  So if someone reports what they honestly believe to be a misappropriation of federal funds, be sure to take it seriously.  Investigate.  Make a decision based on the results of your investigation.  And whether the claim has merit or not, do not take any retaliatory action against the person who reported it.  Be sure the people you supervise also refrain from any retaliatory action.

The case of U.S. ex. rel. Bias v. Tangipahoa Parish School Board was decided by the 5th Circuit on March 9, 2016.  It can be found at 2016 WL 906227.